In today's workplace, prioritizing mental health is not only beneficial for employees, but also essential for the overall success of an organization. As a benefits leader, evaluating the right mental health solution for your workforce involves understanding various pricing models and determining which one offers the most value for your organization. 

This blog will guide you through the process of evaluating mental health solution pricing models, focusing on two primary approaches: a per-employee-per-month (PEPM) fee and a utilization-based pricing model.

Understanding the two main pricing models

Most digital mental health solutions offer two pricing models for their services: 

1. Per employee per month (PEPM) fee

This model involves a flat fee per employee per month, covering access to an app and its features plus a set number of clinical and/or coaching sessions. With this model, you will know exactly what you will be spending each month, which can make budgeting and financial planning more predictable. However, while you will know exactly what you will spend, you can’t predict utilization perfectly and you may spend more or less than what the actual utilization would cost. 

2. Low base PEPM with utilization charges

In this model, an employer is charged a low base fee that only grants members access to the app and its features. Care services, such as coaching, therapy, or psychiatry sessions, are charged for on a utilization-basis. This model ensures you only pay for care sessions your employees use. While the initial quote may be lower, the total cost can fluctuate significantly based on the utilization of services. This pricing model requires the buyer to have a good understanding of expected utilization. This accurate estimation of utilization can be tricky to nail down when employers are used to traditional models that drive low engagement and are switching to more innovative and engaging solutions. 

The Headspace pricing approach

Headspace offers two distinct pricing options that cater to different organizational needs.

Single fee (PEPM)

This model provides a set price for unlimited access to the app experience, mental health coaching, meditations and mindfulness, work-life services, and organizational support, along with a set number of clinical sessions per employee.

Benefits for employers:

• Cost predictability: Employers will know exactly how much they will spend on Headspace for the length of their contract, enabling them to more accurately budget and plan for benefits spending. 

Benefits for members:

• Equitable access: By covering sessions for all employees, the entire organization can have access to mental health services, regardless of their health plan. 
• No cost barriers: Covered sessions ensure members have free access to care, addressing one of the most common barriers to seeking mental healthcare. 

Fee-for-Service or Direct Bill (PEPM + utilization)

This model includes a set price for unlimited access to the app experience, mental health coaching, meditations and mindfulness, work-life services, and organizational support, with clinical sessions billed for on a utilization basis – either to the health plan or to the client.

Benefits for clients:

• Pay for usage: Clients only pay for the clinical sessions used, either through their health plan or by paying Headspace directly, ensuring they receive direct value for their spend. 
• Cost sharing optionality: For clients that go with the Fee-for-Service option and integrate Headspace with their health plan, costs can be shared with members through copays and coinsurance. Alternatively, clients can decide to fully cover sessions through Direct Bill and make them available for free to the member. 

Benefits for members: 

• In-network coverage: Headspace is in-network for most health plans. This means that employees are guaranteed access to an in-network provider, ensuring that care is affordable. 

Headspace is the only solution that provides unlimited coaching and a library of over 3,000 meditations and mindfulness exercises for the flat PEPM fee, which applies to both the Single Fee (PEPM) and the Fee for Service and Direct Bill (PEPM + Utilization) options. With unlimited, on-demand coaching and skill-building content available for all, employers are able to provide a benefit for every member and deliver early intervention with cost-effective support that does not sacrifice quality or outcomes. The best part? The use of coaching and content does not count towards the sessions available to the member.

Why organizations choose Headspace: Value Advantage™

Beyond our cost-effective pricing options, Headspace also offers Value Advantage, a suite of services that ensures impact from the Headspace system, including: 

• Robust performance guarantees aimed at ensuring high engagement and positive outcomes. These guarantees cover engagement metrics, therapeutic outcomes, and even time-to-care, giving you confidence in the value of your investment.
• A business case toolkit to help organizations make the internal case for Headspace with a full overview of proven outcomes, plus a prospective ROI model developed by a third party actuarial firm that helps clients understand potential cost savings.
• Claims-based cost savings analysis for eligible organizations after one year with Headspace. This analysis helps employers understand the financial impact of Headspace on their organization’s healthcare claims.

Case study: large university

In 2020, a large university chose to partner with Headspace to provide comprehensive mental healthcare for their employees. A primary motivator for the university client to partner with Headspace was the availability of our Single Fee pricing option.  The university was particularly interested in this pricing model because it delivered on their key priorities, including: 

• Free access for employees: By covering a guaranteed number of clinical sessions, the university was able to provide its employees with free access to mental healthcare, reducing financial barriers to seeking help.
• Cost predictability and containment: In a world where healthcare costs are consistently rising, the university appreciated knowing exactly what they would spend on mental healthcare over a three-year period.
• High quality, measurable care at an affordable cost: The university valued Headspace’s approach to measurement-based care and our team-based model that delivers the right level of care at the right time for a fixed cost. They appreciated the robust reporting on engagement, outcomes improvement, and satisfaction to help them understand the value of their investment. 

By opting for a predictable pricing model, the university could efficiently manage their budget while offering robust mental health support to their staff.  

“Headspace allows us to put benefits in place that contain costs for employees, contain costs for the organization, and reduce the barrier to mental healthcare across the board.” - Customer, Sr. Director Benefits 

Making the right choice for your organization

When evaluating mental health solution pricing models, consider the following:

• Budget constraints: Determine how much predictability you need in your budget planning.
• Matching employee needs to an offering: Understand the needs of your unique employee population to find the right solution. For many organizations, employees are early on their mental health journey and don't know where to start. An approachable solution that is there for all life’s moments, with a pricing model that rewards early intervention, might deliver the best value on your investment. 
• Performance guarantees: Ensure your solution partner is putting their money where their mouth is and offering fees at risk for key outcomes and access metrics. 
• Insightful reporting: Assess the value of your solution’s reporting and how they can help you optimize your program to deliver the most value on investment. 

By carefully evaluating these factors, you can make an informed decision that benefits both your employees and your organization’s bottom line.

Ready to explore how Headspace can deliver value at your organization? Contact us here.